OPPORTUNITY NO. 3: CUSTOMERS EXPECT A DEAL DURING A RECESSION. People know companies are under pressure and will expect them to react to the recession with superior products, special offers and better service to win their business or get them to buy during a recession. You don’t want to disappoint them. But unless you run a volume business where you plan to always be the price leader, you shouldn’t feel obliged to lower your prices to win business during a recession. Sure, discounts will move inventory today, but it may come at a high cost in the future through the loss of brand value. The key is to give your customers more rather than charge them less.
Remember, it is all about value, not price. Expand product features, extend warrantees, provide special financing terms and offer enticing rewards for becoming loyal to your superior brand. Electronics retailer M-Video owes much of its success to creative promotions it began during the last crisis to lure customers and build loyalty – a practice they continue to this day. Currently, together with Sony Ericsson, they are giving away a card that provides free cinema tickets for one year when you buy select mobile phones. Their customers will be escaping the Russian recession to Hollywood (at least in their imagination), and will no doubt reward the company with loyalty and future purchases.
It’s easier, of course, to follow the market and do what the other guys are doing during a crisis – which will probably be very little. However, with a better understanding of the short window of opportunity brought on by a crisis, and a little chutzpah, your company could use this recession to build a stronger brand and a more profitable business for the near future when Russia bounces back.